SEJONG -- Global credit appraiser Fitch Ratings said Wednesday it has kept South Korea's foreign currency credit ratings unchanged at "AA-" with a stable outlook.

Fitch's rating for South Korea has been AA-, the fourth-highest level on its sovereign ratings table, since 2012, when the rating agency upgraded it from A+.

"Korea's rating balances robust external finances, steady macroeconomic performance, and a record of sound fiscal management against evolving geopolitical risks related to North Korea and medium-term structural challenges from ageing demographics and low productivity," the ratings agency said in a report posted on its website.

South Korea's economy is expected to grow 2.3 percent this year, Fitch said, helped by fiscal stimulus, gradually rising semiconductor prices and reduced trade policy uncertainty.

"However, the spread of the novel coronavirus poses new downside risks to the outlook through its impact on tourism, retail sales, and potential supply-chain disruptions," it said.

South Korea's economy grew 2 percent last year, its slowest growth in a decade. The nation's finance ministry has predicted the economy to grow 2.4 percent this year.

Hit by a trade war between the United States and China, South Korea's exports fell 10.3 percent on-year in 2019 to $542.4 billion.

Concerns are growing over South Korea's export performance down the road amid the new coronavirus crisis.

It is widely feared that the outbreak and spread of the novel coronavirus, which is believed to have originated in the Chinese city of Wuhan, will dampen China's economic growth in the first quarter.

China is South Korea's top trading partner, with slightly over 25 percent of its overseas shipments going to the world's second-largest economy after the United States.

The government has sought to regain the economy's growth momentum by using a more expansionary fiscal approach.

Fitch said, "Korea has the fiscal space to utilize near-term fiscal stimulus."

The ratings agency predicted that Korea's debt-to-GDP ratio would rise to 40.7 percent this year, from an estimated 38 percent last year.

However, plans for wider deficits through 2023 would raise the debt-to-GDP ratio to some 46 percent in 2023, Fitch predicted.

"This could exert more meaningful pressure on the rating over the medium-term, depending on how productivity and growth responds to higher spending," it said. (Yonhap)